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Monday, 28 April 2014

Passing a Law Won’t Get It Done

I've become so annoyed by demands for government intervention to solve this or that perceived social problem: low wages, inequality, lack of personal aspirations. 

One of my Facebook friends facetiously wrote, “Why not just pass a law making everyone good?”

You can almost define economics as the science that explains why passing a law won’t get it done. But taking that statement seriously has made me question the value of a treasured example I've used for many years.

First of all, though, why won’t passing a law get it done?

“The Man of System”

Adam Smith explained that the market economy is so complex because it’s the result of countless ordinary people pursuing their own interests, under a “system of natural liberty.” With the right rules of the game, the pursuit of self-interest improves life for everyone, including the least well-off in society.

Smith, in his magnificent book The Theory of Moral Sentiments, contrasts a benevolent and public-spirited person who refrains from interfering in the affairs of others—“Though he should consider some of them as in some measure abusive, he will content himself with moderating, what he often cannot annihilate without great violence”—with a person who thinks he knows how society ought to work and who arrogantly forces that view onto others. Smith calls him “the man of system.”

The man of system . . . seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that . . . in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it.

When the man of system ignores the inherent limits of his mind and the incentives of those he would command, his hubris will produce consequences at odds with his intentions.

Air Bags and Safety

Air bags provide just one example. Have government-mandated air bags actually made driving safer? According to at least one important study, they have not—and in fact the mandate seems to have done just the opposite.

Analyses of 1993 Virginia State Police accident reports indicate that air-bag-equipped cars tend to be driven more aggressively and that aggressiveness appears to offset the effect of the air bag for the driver and increases the risk of death to others.

Air bags lowered the cost of reckless driving (e.g., speeding and tailgating). Like any other fun activity, the lower its cost, other things equal, the more of it we’ll do. There are of course a host of other examples of good intentions getting bad results. Benjamin, Miller, and North’s Economics of Public Issues is full of them. (Their chapter on “Sex, Booze, and Drugs” is for some reason really popular among my students!)

Economics, then, teaches us why so many government mandates won’t get it done. But that brings me to my own cherished example that I’m now having to rethink. It also has to do with car safety, but from an earlier era.

The “Tullock Steering Column”

Gordon Tullock is said to have commented on the advisability of seat belts in cars back in the 1960s. Instead of seat belts, Tullock argued that it would save more lives if the government ordered sharp daggers installed on all steering columns, 2 inches from the heart! He reasoned that it would dramatically reduce injuries by making people drive much more cautiously.

I've loved this example because it pointedly shows how you can apply sharp economic analysis to cut to the heart of a wide range of activities, including reckless driving. And it sticks with you. In the middle of my class last week, however, I realized that in light of Adam Smith’s penetrating rebuke of the man of system, the example may have thrust me in the wrong direction.

On Second Thought

The man of system doesn’t realize that his interventions might go wrong, or he discounts the possibility. But in the same way, the Tullock mandate to install a steering-wheel dagger is just as likely to produce negative unintended consequences as seat belts and air bags have. While it’s hard to see how a dagger pointed at your heart wouldn’t make you drive slower, what clever work-arounds might you try? And you know we’ll try.

Some might replace the steel dagger with a rubber one. Indeed, a black market in fake steering-column daggers might arise. But that of course could worsen the problem because now some drivers will drive as recklessly as before, while law-abiding drivers will still have daggers aimed at their chests. There may be fewer accidents but more deaths than before.

Something like this probably happened right after the seat belt law passed, as people who did buckle up crashed into those who didn’t. But as we’ve seen, even with airbags that you can’t turn off, injuries may not decline.

I’m sure you could come up with other scenarios. But rest assured, clever and resourceful people will think of work-arounds that won’t occur to you. And when those solutions in turn produce unintended problems of their own, those problems will induce even more mandated “solutions.” And so on. Any mandated solution, no matter how clever or enlightened, would have to overcome this challenge.

So, the economist in me says that the Tullock steering column wouldn’t get it done, either. On the other hand, if the government were to ban brakes on cars . . . .

Saturday, 26 April 2014

Russia Hints at Ushering in a New Gold Backed Ruble

We have been reporting for quite some years that the world will move back to gold backed currencies, now we are seeing the first obvious signs. 
The Central Bank of Russia has made a subtle, yet serious threat against the lynchpin of the American Economy, the US dollar.
According to Russian media,  Russia’s RIA Novosti Bank Rossiya has just released a new logo, which is a gold ruble. This action comes in response to JPMorgan entering the economic battlefield and blocking Russian wire transfers.
Putin has made it quite clear that any attacks on the Russian economy will be answered in with retaliations of their own. This latest threat has the potential to derail the American economy.
If Russia decides to use its vast gold reserves to back the Ruble, the ramifications for the global economy would be huge. Already the US Dollar, which has had the luxury of being the reserve currency of the World for far too long, was skating on thin ice.
I have often said that the first country to release a gold backed currency would have the most to gain and would likely steal the mantle of reserve currency of the world. For years alternative media have speculated that China would be the first to act. This still may be true, but now Russia appears ready to throw its hat in that arena.
Symbolism has serious meaning to President Putin and you can be rest assured that the West is taking this subtle, yet meaningful move very seriously. They know that Russia would have no qualms with using gold as a geopolitical weapon. A weapon that could cause serious problems for the world’s currency markets.

Tuesday, 22 April 2014

The West has forgone capitalism for socialism with a fascist twist

Sometimes pictures are far more effective in communicating an important point. They are extremely effective in undermining respect and confidence, when in the cartoon format. A sequence of graphics struck the cognitive circuits recently. Long explanations will not serve well. The US Federal Reserve has been printing money since 2011 to cover USGovt debt securities in a frenetic manner. They have lost control. They call it stimulus, when it is actually the opposite. It does assist the speculators with nearly zero cost money to borrow, but one must be a club member to win loan grants. 

The Quantitative Easing programs are deceptive. When the program was initially announced, the Jackass claimed it would be part of an endless sequence. With QE1 and QE2 and Operation Twist and QE3, following the failed trial balloon called Taper Talk, it is quite clear to anyone with an active brain stem and absent rose colored glasses that the USFed is caught in a trap called QE to Infinity. It is not stimulative. 

Instead, the uncontrollable bond monetization causes capital destruction. It causes economic degradation. It causes lost jobs and vanished income. It is a gigantic wet blanket to smother and destroy the USEconomy slowly, amidst unending propaganda. QE is the device that will result in Systemic Failure, which is already flashing signals of its arrival.


Money Velocity continues to fall rapidly in both the USEconomy and that of Canada, reaching 50-year lows in the Untied States. The indication is failure in monetary policy, as hyper inflation has killed capital on an extensive basis. The capital destruction is in its fourth year, probably having reached critical mass. Compared and contrasted with fast rising money supply, the systemic failure is obvious to conclude. The exception is to morons, Wall Street junkies, Big Bank criminal elite, and USGovt hacks. 

The fast decline in Money Velocity means that it is not moving in the body economic. The reason is simple. The blood system is contaminated with the USDollar, a toxic currency with no backing in a hard asset. The new money is toxic currency under phenomenal debasement by its own steward, the USFed itself. They redouble their harmful policy instead of abandoning it.

The Money Velocity picture is not pretty. The declining rate has broken lows set 50 years ago. Technically, the velocity of money is the frequency at which one unit of currency is used to purchase domestically produced goods and services within a given time period, like an inventory cycle time. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. 

If the velocity of money is increasing, then more transactions are occurring between individuals in an economy. The result would be that growth (as measured in GDP) should be rising. With falling velocity of money, then fewer transactions are occurring and a recession is indicated. Such is the present case in astonishing rapid deterioration. Consumers and business are holding firm their money rather than investing it, as they see poor prospects. 

New capital formation is not occurring inside the USEconomy, or pitifully little. Debts are being dissolved, usually in default. It should be noted that the velocity of money has also been falling in the EU and Japan. 

The entire global economy is in recession, the pathogenesis shared.


The claim that the QE bond monetization is stimulus is pure propaganda, and could not be further from the truth. The claim disguises the nature of the hidden Wall Street bailout, which is to cover their worthless mortgage bonds, and to cover all manner of derivatives, in addition to the obvious coverage of USTreasury Bond sales. Nobody wants the USGovt bonds anymore, except for Belgium operating as hidey hole on behalf of the Euro Central Bank, and for Japan operating as the usual lackey servant.

The claim of stimulus is 180 degrees wrong.The bond monetization is pure unsterilized monetary inflation, free money shoved into the system without offset. To be sure, Bernanke had a machine to produce money at no cost, except that like with acid it ruins capital. The result is pure inflation, and extreme motivation for the entire world to take on hedge positions with energy, metals, farmland, and more in order to protect themselves from the ruin of money. The effect is felt as a rising cost structure, felt across the world, and thus shrinking profit margins for the entire global business sector.

As businesses realize the lost profitability, they shut down and retire their capital. They turn idle their factor machinery, their design workstations, their office computers, their transportation vehicles, their company buildings and offices. The destruction of capital is the ugliest dirty secret behind the official New Normal of central bank monetary policy.They are killing the system, so as to avoid liquidating the big banks. By refusing to take the proper capitalism path in liquidating failed corporate structures, they have instead chosen to kill capital, force income engines to the sidelines, generate capital formation in other nations (like the East & Asia), and destroy the USEconomy.

The US and West has forgotten capitalism and embraced socialism with a fascist twist.


Contrast the declining Money Velocity with fast rising Money Supply growth. The conclusion is both galloping economic recession and systemic failure, hardly a reward. Yet it continues without interruption, only the promise of interruption. The systemic failure and breakdown is upon us, the evidence stacking up, the message no longer escapable. The two charts back to back make the point convincingly. 

New money is wrecking the financial structures and economic systems by destroying capital. The USFed balance sheet is well over $3 trillion, and continues to grow. The new money is going largely in a hidden Wall Street bailout of their bonds and derivatives. The USFed is a grand liar, as their QE volume is growing, not tapering. They are using proxies and back doors, in addition to airborne dirigibles like the Interest Rate Swap contract. Like with the Hindenburg, the floating monsters will explode someday. The growth in money supply is frightening and alarming, evidence of the wrecked capital and wrecked system. 

Many have called the Jackass a lunatic and alarmist, but they seem incapable to explain the fast rise in monetary base, yet fast decline in money velocity. Monetary policy is a failure. The fiat paper money is toxic. The big banks are insolvent. The global franchise system of central banks should be shut down, except they control the governments, control the finance ministries, control the central banks, control the regulators, and control the militaries.


It is very confusing that money velocity is falling fast, yet central banks are creating new money very rapidly. Imagine a Ferrari or Lamborghini race car spinning its gears, burning its engine out, running out of oil, making no movement. It aint working, started by Alan Greenspan, amplified by Benjamin Bernanke, and to be continued by Janet Yellen. They are stuck with failed monetary policy, and cannot alter the destructive course. 

The Jackass has maintained that a critical error was committed by granting China the Most Favored Nation status for trade. It was actually a fatal error. The industrial investment is taking place in Asia, led by China. Wall Street and the USGovt leadership at the time, under President Clinton and Robert Rubin, betrayed the nation. They leased gold from the Chinese, in order to perpetuate the fiat paper USDollar regime. They deployed the lunatic Rubin Doctrine, to wreck next year for a few more tomorrows. In doing so, the Chinese benefited from $23 billion in foreign direct investment in the space of a mere two to three years. 

But the blowback was fatal.

The USEconomy lost its industrial critical mass, and has inadequate traction from monetary policy in accommodation. It still has some industry, but not enough. The ultra-low interest rate makes borrowing costs low, but grotesquely inadequate new capital formation has taken place in the USEconomy. It is being done in Asia. Worse, the new industrial parks are springing up across the US landscape, operated by Chinese industrial masters. 

The QE is not stimulating the USEconomy because 1) the US lacks critical mass industrially, 2) the regulator burden and corporate tax burden and ObamaCare burden are too great, and 3) the nation is too busy with court cases against the big banks and waging war against fabricated enemies. This is Game Over !!!

As David Chapman points out, "It all seems counter-intuitive that the velocity of money should be falling even as the ECB, the Fed, the BOJ, and the Bank of Canada have been maintaining low interest rates for years in order to encourage borrowing and keep the cost of money low. The central banks have also pumped billions of dollars into the economy through QE and other stimulative measures. The result has been an explosion in the monetary base, a sharp rise in M1 but lower growth for M2 and sluggish M3. The economies are weighed down with debt, banks are reluctant to lend, consumers and corporations are unwilling to borrow. The money instead has been used for speculation, primarily going into risk assets such as the stock market. Corporations instead of investing in new plants and investment are sitting on cash hoards or buying back their own shares. Both are non-productive."


The Jackass howls in laughter at the claim that Canada is different, an independent nation, a refuge of wiser leadership, the Great White North with more integrity. What nonsense! Canada is in the US pocket, and has been for a very long time. The arguments that Canada is different or better or free from gold corruption are truly baseless and stupid. The big Canadian banks short gold with Wall Street banks, and have been doing so for a long time. See the Scotia Mocatta alliance with JPMorgan in recent months. 

The Canadian Govt efficiently vacated all their gold in the 1980 and 1990 decades. It was probably stolen in part by Mulroney, just like as Bush & Clinton & Rubin stole the US gold. See the hidden brisk activity at Barrick Gold, where the ex-prime minister sat on the Board of Directors. Pay close attention to the Evergreen gold contracts by Barrick, which never force under contract the delivery of gold, only the sale under dubious specious contracts. Then the big Canadian banks are deeply committed in the Wall Street and London derivative entanglements, just like the big US banks. All their big banks are hollow reeds, just like in the United States. 

Lastly, the Canadian stock exchanges engage in rampant naked shorting of the mining stocks, not by those who wish to preserve the fiat currency system, but rather by the investment banks that fund the capital requirements for the mining firms themselves. They sell more shares than granted on finance deals. The most disturbing gold factor from Canada in the last year has been the collusion of Scotia Mocatta with JPMorgan in the provision of gold bullion. They have been offered some special deal for the future, but that future will include a charred landscape and devils as warlords. Scotia Mocatta is in Satan's service at the Wall Street altar. The old formula still holds: CANADA = UNITED STATES / 10 (just like always). The Jackass expects an extreme conflict very soon, as Canada is far more a Chinese commercial colony than the Untied States. My expectation is that Toronto, Ottawa, and Vancouver will soon begin marching to a different drummer out of Beijing, Shanghai, and Hong Kong.


Bernanke was correct. The cost of newly printed electronic money is zero. But he left out the other half of the statement, since he is a lousy economist. The value of the newly printed electronic money is zero. Due to his pathetic education, Bernanke overlooked or fails to comprehend the effect of hyper monetary inflation. Endless spigots of new fiat money are not the salvation of a system, but rather a cornucopia of new capital formation can lift the system in an effective legitimate manner. 

The unchecked inflation results in the destruction of capital, the wreckage of income producing engines, the extreme ruin of jobs. The new money goes down a drain. The curvature to the drain is defined by toxic bonds even as the inflection is marked by harmful derivatives. The stubborn behavior of the central bank franchise system operations, their deep collusion, their phony patches to the bond structures, their self-dealing $23 trillion in near zero interest loans to themselves, their waged war to protect the King Dollar regime, it is all destructive. Sooner or later the people and madding crowds will awaken, surely very late in the end game.


The protection is with Gold & Silver bars & coins. The solution is not more bond purchases, broader monetization programs, more liberalized bank reserve rules, or suspended accounting rules. The solution is liquidation of the big dead zombie banks, and a return to the Gold Standard. It will be put in place. It will be installed. It will arrive with a vast new structure of legitimacy. It will include barter systems and decentralized mechanisms. It will include new Letters of Credit based in Gold Trade Notes. 

But the East led by Russia, China, and followed by India, Japan, and South Korea will be the promoters, installers, and architects of the new strong stable equitable Gold Standard system that the Untied States dreads and fears. The West will continue its rapacious confiscation of wealth and its vicious devotion to war until the platform they stand on built of USD ceramic tiles and USTBond cables and SWIFT pylons collapses. The return of the Gold Standard will relieve the global economy of the burden and wreckage of central bank ruinous and criminal actions. The damage will be extensive. The survivors will be owners of Gold & Silver. The rest will become debt slaves in a nasty fascist state.

Monday, 7 April 2014

Golden Jackass: Emerging Dynamics of Petro-Yuan Standard

The shocks will be many as the USDollar struggles and falls off the global financial stage in full view. The desperate maneuvers like in Syria and Ukraine should be seen as last ditch efforts to save a dying system.

For two decades the USDollar has been defended by military means. Worse, for 50 years the USGovt has been a hidden nazi enclave of wicked fascists who have hidden behind their overt disdain for communism, with Kissinger the flag bearer, with Brzezinski the ideologue, with Papa Bush the executor, with narcotics and genetics and gold thefts their principal agenda.
The official US support of fascist regimes includes a list of nations as long as your arm. Since 2008 when the Lehman kill was executed in order to rescue Goldman Sachs, when Fannie Mae was hidden under the USGovt roof to prevent its $trillion fraud from being exposed, and when AIG was tucked in the USFed basement closet for ample monetized rescues to patch the derivative black holes, the Anglo-American banking system has indeed been going through trials and tribulations, leading to its death throes.
The climax of the banking system death process is upon us finally, the fibrillations of sudden illiquidity against the backdrop of relentless unforgiving insolvency so evident to those with eyes that function. Never before has the USGovt been so plain in its fascist ways, with abuses on domestic soil and installed nazi regimes on foreign soil. They kill economies systematically. They wage war relentlessly, using it as a business initiative. They control bank movements obsessively. They monitor human movement compulsively. In Kiev were seen the swastikas on armbands. The name Neo-Con is derived as a more palatable version of Neo-Nazi. The game is over for their captured gutted violated USDollar kingdom in a veritable killing field of nations.

The entire world must create a more workable system, an equitable system. The banking structures and trading systems require it. No longer can the Anglo-American free credit card be tolerated. No longer can the exporting nations accept vendor financed trade, the credit extended by the producers. No longer can the world be subjected to USMilitary aggression, financed by the victim nations. No longer can a deeply corrupted and immoral pack of leaders be permitted to roam in privileged channels. No longer can absent criminal prosecution be forced upon the masses. No longer can the battle among vile secular bankers and satanic bankers and bankers from the Sanhedrin tree be permitted in the open. No longer can the battle go on for tight global control with liberties tossed in the dustbin. The path to totalitarianism financed by narcotics in a magnificent undertow must be interrupted, the Orwellian world within view.

The Paradigm Shift is far along, no more an infant project. The Western leading nations have transformed into the Axis of Fascism. The Eastern leading nations have emerged as seeking viable fair solutions, essentially a return to the Gold Standard. The physical gold migration from London and Switzerland proves the shift in power underway. The swing nations of Germany, Saudi Arabia, Turkey, India, and Iran will play pivotal roles in shaping the future. The year 2014 will not end with any remote resemblance to its start.


Ukraine was clearly the Waterloo event for the USDollar, which requires the passage of time for critical changes in psychology and perception. Putin is in no hurry. Besides, when Russia does respond, it will be on the financial and economic front, where the US & British puppeteers are legless and without moral spine. The US-led Western NATO forces, joined by secretive mercenary forces and Blackstone thugs, invaded Ukraine and thereby fell into a significant trap set by Putin. The Germans had been making important moves toward a deeper alliance with Russia. 
The first interruption was Cyprus, where Russian banks conduct intermediary operations and where GazpromBank has offices, and where the Russians were purchasing gold in large quantities. 
The second interruption was Syria, where the Russians were working steadfastly to establish the Iran Shiite gas pipelines for Gazprom system integration, which would (will) supply the Western European market. 
The third interruption is Ukraine, the last ditch attempt to cut Russia off from Eastern Europe, using Western energy firms as the leverage device. Under the cloud of confusion, the Western fascists stole the Ukrainian central bank gold and diverted $70 billion of public funds into Swiss banks. 
The world is on the path to demanding a solution, as the fascists are being recognized and called out. The world demands a viable solution. It is coming. It will shake the world.


Since the Black Monday 1987 event, the big US money center banks became dependent upon narco money laundering functions. Since the 2003 wars with Iraq and Afghanistan, the big US banks would fail without the steady narco fund injections. Managing reserve efficacy requirements in overnight accounting has become a daily challenge. In the following decade, these big banks, together with the big London banks, joined in service by the big French and German banks, have lashed themselves together with derivative rope, while working in deep collusion to rig the LIBOR, the FOREX, and the GOLD markets. 
The bold crimes and illicit activity and blatant malfeasance are in the open nowadays, have been in the open for over two years, yet without any semblance of prosecution, remedy, or restitution. The regulators continue in their musical chair exercises, which include sitting on their hands while saluting their bank masters. The big US banks have become control centers for criminal interventions in some bizarre service to preserve a corrupted system, while crafting legislation in the USCongress that serves their purposes. Their big bank structures are as filled with toxic matter as they are crime syndicate vault stores. The world demands a viable solution. It is coming. It will shake the world.


It has become comical that supposed experts actually believe certain markets to be viable, or offer value, or present opportunity. The following financial markets are deeply corrupted and heavily controlled. USTreasury Bonds are maintained by direct unsterilized USFed monetization and bond purchases, reinforced by Interest Rate Swap derivative contracts. The USTBond market controls are furthermore blessed as the new normal, a stabilizing force, in almost full consensus. 
The US Stock market is maintained by the Working Group for Financial Markets, when the Wall Street banks are subject to fatigue. The USDollar is maintained by the USDept Treasury's favorite tool, the Exchange Stabilization Fund, which employs FOREX derivatives with its army of Western banker tools. The Crude Oil market is maintained by the Wall Street trading desks, but to a lesser extent of control in recent months, as the Saudi Petro-Dollar is fast fading into the annals of history. 
The Gold market is maintained by Wall Street naked shorts, in concert with London bank naked shorts, aided by SPDR Gold Trust inventory raids, aided by denied COMEX deliveries, all under the sleepy eyes of the Commodity Futures Trading Commission. The US Big Bank stocks are maintained by phony accounting blessed by the Financial Accounting Standard Board, which overlooks the falsified portfolios for their asset values and hollowed out reserves. One could go on further. The world demands a viable solution. It is coming. It will shake the world.


The global banking system cannot continue to function with USTreasury Bonds as reserve capital. It is not pristine, not of high value, not of any value really. The USTBonds are toxic paper that serves as phantom foundation for the Western banking system. The fiat currencies are backed by debt which is falling apart into crumbs on the floor. The USTBonds cannot be called AAA-rated much longer, since they are from a nearly infinite USGovt debt balance sheet, when considering unfunded liabilities. 
The global banking system suffers from acute blood contamination. The bank welfare, the social network, the broad-based pensions, the war costs, these have bankrupted the USGovt balance sheet at a time when the USEconomy fails to recover, except when the Weimar rose colored glasses are worn for perception visual aids. The world demands a viable solution. It is coming. It will shake the world.


The backlash to the widely approved USFed hyper monetary inflation policy has finally come. The backlash actually began last September 2013 when the pathetic trial balloon from Taper Talk had its bluff called. The outcome was the stark realization that the QE to Infinity was actual policy, cheered on by the financial markets, begged by the US corporate captains of industry, who both urgently require credit faucets to flow. 
The global fallout has included higher food prices, higher business cost structure in every nation, shuttered businesses, and profound economic deterioration, which has resulted in widespread capital destruction. Anyone like Michael Pento (see CNBC last days of March) who calls the USFed policy destructive is wiped clean. The entire Eastern world is demanding an end to the debasement of USD-based assets and reserves, along with the harmful influence to lift cost structures everywhere. The world demands a viable solution. It is coming. It will shake the world.


The Eastern nations have had enough of the Anglo-American hegemony (called bullying or criminal force feeding). They dislike the usual weapons used such as Bank SWIFT blocks, bank center obstacles, sanctions against companies doing business with labeled rogue nations, interrupted contract bidding, and more. The Eastern nations began banding together with the G-20 Meetings, then put the G-7 and G-8 into the shadows, then built the BRICS nation consortium. Finally they are constructing the potent BRICS Development Bank and the BRICS Central Bank and the BRICS communications network. Their central bank is the sleeper cell in the mix. It will be revealed soon as the processing center to convert USTBonds to Gold bullion. Later it will convert other major nation sovereign debt to Gold bullion, like UKGilts, EuroBonds, and JapGovtBonds. 
The Eastern nations have acted in unison, shown solidarity, worked in coordinated channels, and seek common goals. They are a force to be reckoned with, while the G-7 diminishes into a mist of a faded empire. Out of the BRICS will come new organizations and institutions that fortify the East and display in full force the Global Paradigm Shift. The BRICS and G-20 are the agents to the shift, led by Russian & Chinese projects, pacts, accords, and initiatives. It is coming. It will shake the world.


When the USGovt imposed sanctions against Iran in 2012, the chest beating was in full view. The celebrations took place before the battles were waged, and then lost. The British and European Governments followed suit, like the goose stepped phalanx they represent, all done in full view. The primping in the mirror was in full view. The browbeating was in full view. The handshakes were in full view. The banker-led Western governments were very impressed with themselves.
The Jackass at the time mocked them at every opportunity and every turn, for their futile efforts and self-aggrandizement. The triangle or Iran, Turkey, and India defeated the USGovt sanctions with clever gold trade settlement schemes, using intermediaries, avoiding legal obstacles, and accomplishing the task to make payments for Iranian oil & gas shipments. The US left a door open for Iranian companies to serve as mules to deliver gold bullion, gold that was provided by Turkish banks acting as intermediaries. The Indian energy customer found a way to make payment to Iran. The sanctions workaround was born. It will serve as a model in defiance to the Western clown show, which erected a veritable Maginot Line that the Persian mules jumped over. How pathetic the arrogance of the Anglo-American banker hacks! 
The Gold Trade settlement has a prototype, developed but in need of some refinement. The Gold Standard will return, not in bank transfer platforms or currency trading platforms, but in peer-to-peer transactions made in settlement. The world demands a new payment system, an alternative to the deeply flawed USD-centric current system. Even effective viable barter systems are to emerge. It is coming. It will shake the world.


A year ago, the Shanghai crowd began the highly disruptive practice of permitting a higher gold futures contract price, when compared to the corrupted suppressed New York and London price. Perhaps some extra optimism was involved, hoping for wide premiums in Shanghai versus NY/London. However, even 2% to 3% is sufficient to promote arbitrage and a gradual but significant drainage of gold bullion, leaving London and entering Hong Kong and Shanghai. Next comes the Shanghai crude oil futures contract, to be priced in Chinese Yuan terms. The new Shanghai Free Trade Zone is fast forming. 
It will feature fully convertible Chinese Yuan by June, not in two years. It will happen this summer. The component of Shanghai Yuan price for crude oil and gold together will be highly disruptive to the entire Petro-Dollar system. The endorsement must come from the Saudis, which will happen on cue. It will spawn the Petro-Yuan, to first challenge the Petro-Dollar, then displace it. The foundation for the USDollar is fracturing in full view. It is coming. It will shake the world.


Russia is the true powerhouse in the crude oil sector. The Saudis are yesterday's news, as their excess capacity is non-existent. Their water cut is over 90% in the giant Ghawar, meaning its fields produce almost ten times as much brine water as crude oil. The Russians have the excess capacity and will begin to flex their energy muscles very soon. Price is determined at the margin, not the myth or false billboard. The focus has been on natural gas, but the oil & gas will be double barreled shot gun applied to alter the European hearts and minds. The Jackass forecasts that the Kremlin will announce that oil & gas payments by European clients must be in Rubles, Yuan, or Gold bullion. 
The surprise will be inclusion of Yuan for potential payments to Russia, which will demonstrate an alliance with China. Thoughts and threats of isolating Russia are as absurd as notions of gold sitting in Fort Knox. A nation with twelve time zones cannot be encircled. The payments for Russian energy sales in Yuan terms will be a significant part of the Petro-Yuan system to emerge. Moreover, the Russians can use the Yuan to purchase finished products from China, and to aid the internationalization of the Yuan itself. Some serious back scratching is about to be exhibited by the Eastern Dynamic Duo. It is coming. It will shake the world.


Naturally, the world's biggest oil importer will work to set terms for its own purchase of crude oil. They will hasten a change from any present system that requires them to pay for Saudi oil, or Iranian oil, or Indonesian oil, or Nigerian oil, the change to feature payment in USDollar terms. They have sufficient market power to dictate terms, and they will do exactly that. They will insist on purchasing oil imports with transactions completed in Chinese Yuan payments. 
They will strongarm the Saudis into accepting Yuan payments, and the entire cast of weakling OPEC players will follow the leader. The Petro-Yuan will be born in Saudi Arabia, with a Beijing phone call. It is coming. It will shake the world.


The Saudis are in a huge bind. They lost their USGovt protector for the last 50 years. They need a new protector in order to continue the pilferage and plunder of the desert kingdom's natural wealth. It is hardly a royal family asset, but the West enables it to be exactly so. The Arab Spring charade and smokescreen effectively ripped the cord between the WashingtonDC and Riyadh. The turning point was Egypt, where the US engineered a Morsi regime installment, which the Saudis quickly eradicated. Now the dirty little secret is that the Saudis are more in control of the Suez Canal than the US and British gangsters, where Persian Gulf oil for the European market must make passage. But the Persian Gulf needs more unity, and needs a cohesive agent, which must be design sail some impressive ships and sport some hefty guns. The Chinese not only fit the bill, but the Saudis have already answered the call. The economic summit in late March in Beijing, led by President Xi Jinping and Prince Salman, provided all the necessary groundwork. The Saudis have a Chinese missile deal in the works, sort of a consummated marriage. The Saudis will soon announce, while standing under the Chinese umbrella, that any oil payments are acceptable in USDollars, Chinese Yuan, Euros, British Pounds, Swiss Francs, and Japanese Yen. The Saudis will transform themselves into an equal opportunity crude oil mart with many working windows. They will kneel before all fiat paper princes, including the King Dollar. It is coming. It will shake the world.


The influence of OPEC will fade with the Saudi desert sun. The OPEC cartel serves as the Petro-Dollar active platform to enforce the payment system in USDollar terms. Deviations invite USMilitary reaction. See Iraq, dateline 2003. See Iran, dateline 2012. Oil policy is dominated by the Saudis in the OPEC meetings, often held in Vienna. The Arab Royals like to get out of the office and mingle, even see the world that is not sun scorched. In order to comply with the Chinese new leadership in the oil and currency nexus, the Saudis will have to swallow hard and permit the Iranians to become a leading player within the NatGasCoop. It will supplant OPEC. It will be led by Russian Gazprom. It will not be dominated by oil transport ships, but rather by natgas pipelines. The key new ports will be in Syria, in Israel, with connector valves to Greece, Ukraine, and soon Pakistan. What OPEC is to the Petro-Dollar, the NatGasCoop will be to the Petro-Yuan. The risk to the Arab kingdoms is a return to desert tents and away from palaces. The coop cartel will include strange bedfellows like Iran, Qatar, Israel, Turkmenistan, Algeria, and Russia. It is coming. It will shake the world.


The grand prize has always been Europe. With NATO, the United States captured it. But with bond fraud, failed banks, monetary inflation, toxic patches, austerity plans, bank bail-in threats, agency eavesdropping, and narcotics trafficking, the Anglo-Americans have wrecked their alliance with Western Europe. The clincher and breaking point will be action in Ukraine. The USGovt has been in violation of NATO Treaties forged with Russia ever since 2004 when the defensive missile shield was put in place in Eastern Europe. At the same time, the US courted certain eastern nations to join NATO in a real big stretch. The stretch to impose a nazi regime in Kiev is the final straw. The European nations are splintering away from the US fold, one by one. The reasons stated appear to be financial in uniform fashion. 
The London bankers and the German bankers will not forego the lucrative Yuan Bond trade, just for a lousy two bits in Ukraine. Besides, they did not share in the looted Ukraine central bank gold, which went to New York Fed vaults. The United States will find itself horribly isolated again and soon, just like in Syria. The Western energy giants of Chevron, Royal Dutch Shell, and ENI of Italy will not enjoy sufficient spoils to keep the European alliance together. It is a pathetic alliance. It has no strong dogma besides thefts and sacked control. It has no deep commitment. The nazi modus operandi has been laid bare. Europe will move gradually to the future, and depart from the past. Europe will be led by Germany, whose industrialist elite are 90% pro-Russian. Europe will turn its back on the United States initiative in Ukraine, with political lip service offered in support, but with absent military commitment and support, or approval for attack under any pretense. Europe will back the Petro-Yuan that is pushed by Russia and China, thus disproving any hint of Russian isolation. Europe will be the midwife to the Petro-Yuan birth. It is coming. It will shake the world.


The death of the Petro-Dollar was written when the USFed announced Quantitative Easing and the uncontrolled spew of bond purchases. The central bank monetary policy to debase the USDollar forced Eastern nations to begin diversification plans out of the USTreasury Bonds held in banking reserves. They suddenly become toxic, falling in value, or propped in value by the Weimar press managed in New York. The death of the Petro-Dollar was confirmed when the Saudis ousted Mohamed Morsi from the US designed throne in Cairo Egypt. One must wonder what early assurance China had given to Riyadh Royals in order for the Saudis to pump $6 billion into the Egyptian coffers, alongside certain other Persian Gulf participation. The death of the Petro-Dollar was given a hidden eulogy in Beijing when Xi and Salman worked out numerous supporting deals to lay the foundation for a decade of union. The death of the Petro-Dollar will cause unprecedented ripple effects across the Western world. It is coming. It will shake the world.


The shock waves will be enormous and far reaching, hitting every sector of the USEconomy. The price system will undergo shock from the unwillingness of foreign suppliers to accept old USDollars. The import prices will rise significantly. The supply network will undergo shock from shortages and pockets of inventory lapse. The USGovt will find tremendous challenges in funding its deficits, while the USFed loses its control of the USTreasury market. Expect even the derivative machinery to suffer deep strain, if not breakdown. Foreign banks will engage a grandiose dumping exercise. The new Scheiss Dollar must be born in order to finance the US debt and to assure imported supply, thus to ensure continuation of the USEconomy itself. The USGovt has no jurisdiction over foreign contracts, period! The shock waves for the Petro-Dollar death will urgently force the launch of the domestic Dollar, the decision hastened by the extreme vacuum to come. The Scheiss Dollar will feature an exchange rate that must undergo a painful sequence of devaluations. The poor currency baby will not find stability easily, since devaluations will not be large enough to bring about equilibrium, and will be too small in the hope to avoid disruptions. It is coming. It will shake the world.


The motive for Cyprus action, Syria action, and Ukraine action is to prevent, obstruct, and forestall the progression in the Eurasian Trade Zone. If truth be known, the conflict between the United States and Russia has additional roots in Georgia, dateline 2008. The skeletal system for the trade zone is to be the Gazprom energy pipelines and the scattered LNG nodes. Its headquarters will be Moscow, Beijing, and Berlin, all shown in time, with strong satellites in Delhi and Tokyo. The role played by Iran, Turkey, and Brazil will also be important. The passage of time will be crucially important in the following weeks and months, since time permits the rapid degradation. All of Eastern Europe is watching the horror show in Ukraine, and especially in Kiev. As the rape and pillage is continued in orchestration by the USGovt security agencies, the European Soros gangsters, and the Blackstone thugs, all Eastern European nations will be watching closely. They will wish to escape the scourge of the Anglo-Americans, their French tyrant poodles, the Big Oil firm plunderers, and the Attila the Hun lookalikes. The contamination of the water tables in Ukraine, Bulgaria, Romania, and Poland might turn the tide. The trap has been set, but it cannot spring shut to trap the Western pirates without the passage of time. Putin will use that passage of time to permit the public sentiment to change, and to permit the Ukraine Economy to collapse in double quick timeframe. Without its central bank gold, and without the $billions in official state funds, and without the Western investors, the nation will collapse in three months. It is coming. It will shake the world.


A tremendous opportunity has arisen. The Chinese are in a position to mediate between the United States and Russia, while in the background working vigorously to put the Petro-Yuan final touches in place, while in the background working to put the Gold-backed Yuan currency in place, while in the background working to build the components to the Eurasian Trade Zone, while in the background working to convert the BRICS Banks into a gold acquisition office. China can look like the champion for peace, while winking at Putin through the Kremlin window. Furthermore, China can take the lead in diplomatic roles in the Persian Gulf, like between the Saudis and Oman. Many are the bilateral conflicts within the Persian Gulf, all the result of the Moslem Brotherhood influx supported by the Al-Qaeda main office in Langley. Never has their Al-Q leadership and coordination been more obvious from US offices. As footnote, let it be known that Germany has an open opportunity to rise as the European diplomatic champion. The Germans can mediate between Russia and the other European nations who wish to break away from the US Nazi camp. The important swing state for the uniting of Europe with Asia is Germany, and has always been Germany. The Schaeuble foibles will be overcome in time, a bump in the road. It is coming. It will shake the world.

Wednesday, 2 April 2014

UK Bank Accounts Can Be Raided After Budget

HM Revenue & Customs will be able to directly access taxpayers’ bank accounts in order to recover unpaid tax, under measures announced in this month’s Budget speech.

The little noticed move gives HMRC similar powers to raid bank accounts and recover tax and tax credit debts in excess of £1,000.

In the Budget Red Book, the measure is described as follows:

“The government will modernise and strengthen HMRC’s debt collection powers to recover financial assets from the bank accounts of debtors who owe over £1,000 of tax or tax credit debts, have the financial means to pay, and have been contacted multiple times by HMRC to pay.”

At the moment, if HMRC want to seize your property or cash, they have to take you to court, win and then get a court order. Now, after a couple of warning letters and a phone call, they can do it in conjunction with your bank, with a touch of a button.

Crucially, there’s no safeguard built into this system. There should be a transparent and fair process and an appeals process.

Now, if HMRC officials decide you owe them cash, they can just take it directly from your bank account. If you haven't managed to reach agreement with them, then you'll just wake up one morning, check your bank account, and find your cash is gone. No insolvency proceedings, asset freezes, debt collection agencies or court proceedings. Just the government taking out whatever it believes it is owed.

This significant HMRC legislative change was buried deep in the Budget document and comes amid preparations by international monetary and financial authorities and the Bank of England for bail-ins.

The UK government can now confiscate UK citizens money directly from bank accounts while it decides if you have broken the law or not. This is a significant power grab and this and the real risk of bail-ins are another reason to own physical gold outside the banking system, in jurisdictions that respect private property.